Executive Summary (Individual Assignment)
Marcy Gachette
Fort Hays State University
Dr. Mary Martin
MBA 812VB – Marketing Management
December 16, 2022
Purpose
To justify the continuation of In-Motion Cycling.
Analysis
Upon review of sales information at the end of year one, focus was shifted away from
the work bike to the mountain bike and the recreation bike. The mountain bike had a total market share
of 88%. Additionally, strategic direction had to be re-focused to target geographic locations that were
not heavily saturated to minimize competition. Such locations included Portland, Buenos Aires, and
Nairobi.
The company maintained healthy cash flow in year one by spending less in advertising. This
allowed for a larger advertising budget in year two once the profitable bikes were identified. Returning
the mountain bike to Europe in quarter eight proved to be a great strategic deviation from the marketing
plan resulting in sales revenue of $679,620. The work bike was also removed from the NORAM market
due to continuous low demand.
During the second year of In-Motion Cycling, the company saw a $10 million increase due to
effective marketing strategies. The company’s gross profit also increased steadily by over $5 million.
The increase in advertising expenses led to profit generation from bike sales. Beginning with a negative
net profit in year two, the company was able to recover strongly with $3.9 million in net profit with
strong market performance. Substantial marketing and operational investments were made which
contributed largely to the success of the company. These involved eight stores, 67 salespeople, inbound
and outbound marketing, social media marketing, and a $28,250 SEM among others.
The highest demand by brand went to the recreation, mountain, speed, and work bike segment.
Because of low brand profitability, heavy investments were not made with the youth bike which
consequently performed less strongly. With steady increases in demand over year two, total demand
peaked at 12,534 units sold. Staffing of stores was adequate with In-Motion Cycling surpassing all
competitors for demand per person in sales and service. This can be attributed to professional training,
sales incentives, and brand promotions.
Work continued with brand judgment and ad copy management with deep analysis being
performed of competitors’ products with the highest brand judgment. Results showed that ad design
improvements were necessary, and this was executed. The results were improved brand judgment of
each segment. By the end of year two, the company received ‘very good’ ratings for the recreation
bike, and ‘good’ ratings for the mountain, race, and youth bikes. The accurate mix of ad content,
identifying consumers’ problems, and promoting value before brand name resulted in these remarkable
improvements from earlier ‘acceptable’ ratings.
Bike sales were also enhanced through heavy R&D investments which surpassed all other
competitors’ investments. This led to the adding of value to the most profitable bikes, and
enhancements to the mountain and recreation bikes. Following useful market research, the bikes were
designed for the consumer in mind with the most valuable features and benefits. This led to 13 million
sales in quarter eight.
Following the strategy for high potential demand with fewer competitors, stores were opened
in Johannesburg and Melbourne which successfully led to maximum ratings for the categories of total
performance, market performance, market effectiveness, and creation of wealth. Investing more in
sales and service promotions also contributed to the company’s end of year two success.
The company’s key strengths include market effectiveness with top total market share of 27%,
highest market share and brand judgment for the targeted segments of mountain and recreation bikes,
best rated ads in the work and recreation bike categories, good price judgment, and creation of wealth
for the company.
Recommendation
The before-mentioned data shows that In-Motion Cycling can both meet the
needs of consumers and provide a positive return on investment to corporate headquarters. It is
recommended that the company continues its operations with the existing organizational structure.